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Southwest Airlines Co. Reveals Its Washington, D.C., Plans

Southwest Airlines will add about 27 more flights from Reagan Airport by the end of 2014.

There weren't too many surprises - for the most part, Southwest will be adding service to cities where it has high market share. Since American Airlines currently holds a monopoly (or a dominant share) on most of these routes, this stepped-up competition will reduce the profitability of American's Reagan Airport operation.

Southwest's new routes
Early last month, I told investors to expect Southwest to use its new Reagan Airport slots to add flights to its biggest focus cities within the 1, 250-mile perimeter governing most Reagan Airport flights. On that basis, the top candidates for new service were Chicago, Dallas, and Orlando, followed by Nashville. Houston and St. Louis were top candidates for additional flight frequencies. (Both cities have two daily roundtrips on Southwest today.)

Of that group of six cities, only Orlando was left out of Southwest's expansion plans. Instead, Southwest is spreading its Reagan National Airport slots over more cities. The net effect will be the same: more options for D.C. area travelers and tougher competition for American Airlines.

Southwest plans to begin using its Reagan Airport slots in a staggered fashion between August and November. On August 10, it will begin flying six times daily to Chicago's Midway Airport, the top airport in Southwest's route network. At that time, Southwest will also begin offering three daily roundtrips to Nashville and two daily roundtrips to New Orleans.

On September 30, Southwest will add an additional three daily flights to Chicago (bringing the total to nine), along with two daily flights to Tampa. Lastly, on November 2, Southwest will begin flying from Reagan Airport to Akron/Canton, Dallas Love Field, and Indianapolis, and it will add more flights to St. Louis and Houston.

Southwest hasn't published its fall schedule yet, so the exact number of flights to each city in this round has not been finalized. Assuming Southwest does not drop any of its current flights, it will be able to add 10-11 daily departures across those last five cities.

A change in the competitive landscape
Southwest's new routes will primarily impact American Airlines, which currently has a dominant position at Reagan National Airport. American flies from Reagan Airport to all of the cities where Southwest is starting or increasing service, except for Houston.